LIfe Style

Avoid These Common Mistakes When Calculating Premiums For Life Insurance Policy


As the pandemic continues to deteriorate the lifestyle of millions of people around the globe, the importance of health insurance has grown more than ever. Additionally, the unforeseen circumstances that you may encounter only validate its significance even more.

However, while choosing health insurance, there are various factors that need to be considered such as the life insurance premiums. One thing that differs from insurer to insurer is the rate of premium that you pay throughout the tenure of your policy.

It’s worth knowing that premium rates fluctuate greatly based on various factors such as age, lifestyle, medical history, profession, and a lot more. With that said, you must know how to calculate your expected premium rates to make the most out of your health insurance.

Talking about the calculation of premium rates, you might already be aware of the factors that affect it. However, there are some pretty common mistakes made by people in the process, which may hinder the accuracy of your estimation.

Therefore, let us take a look at some of the most common mistakes that people make while calculating the premiums for their life insurance policy. Moreover, you’ll also know how to avoid these mistakes and make your estimation a lot more accurate.

Underestimating Age and Gender Specifications

A lot of people never consider their age and gender while calculating their life insurance premiums. However, both of these factors have a significant impact on your premiums. As a general rule of thumb, the rate of premiums tends to increase with age.

In simple terms, younger people have to pay lower premium rates as compared to elders. That’s because as you age, you’re at a greater risk of contracting health issues that increase your likelihood of claiming your health insurance in the future.

On the other hand, if you are a woman, you’re most likely to seek medical assistance between 18-60 years of age due to various biological processes like pregnancy. Whereas, men are more likely to seek medical attention due to accidents.

An insurance company considers these factors too while calculating your premiums. Therefore, while you’re making an estimation, make sure you don’t forget to keep these factors in mind for greater accuracy.

Generalizing the Type of Policy

Due to less knowledge about policies and insurances, many people also make the mistake of ignoring their choice of policy while calculating their premium rates. But you must keep in mind that your health insurance premiums are also dependent on the type of policy you’re purchasing.

There are various types of health insurance policies like family floaters, individual plans, group insurance plans, and so on. Additionally, the premiums also fluctuate when you purchase a condition-specific insurance plan such as a critical illness policy or personal accident policy.

The premiums also vary within the subcategories of a particular health insurance policy. For example, if your preferred plan offers five different choices, each with varying insured sums and benefits, the premiums will differ based on the benefits offered in each individual subcategory.

Read Also: Most Prominent Tips At The Time Of Purchasing The Travelling Insurance

Ignoring the Add-On Covers

The scope of coverage that your health insurance plan offers impacts your premium rates gradually. While the standard plan may not provide you an appropriate cover, you can always use add-ons and riders to extend the coverage of your policy.

That’s when a lot of people tend to make mistakes in calculating their life insurance premiums. While calculating, people never pay attention to these add-ons and how they impact their premium rates because they don’t know much about them.

These add-ons act as additional features that can be added to your plan as top-ups to increase its coverage. More the benefits offered by these add-ons; the higher your life insurance premiums will be. Therefore, make sure you understand the benefits and caveats of the riders you choose and calculate your premiums accordingly.

Not Using Online Premium Calculators

There are a lot of factors that affect the premium rates of your health insurance policy. With that said, using an online life insurance premium calculator tool can help you make the process lenient while ensuring great accuracy as the calculation is done automatically.

Still, a majority of people never consider using these tools and choose the manual option instead. These tools allow you to make informed decisions that help you plan your finances in a better way. Therefore, make sure you make use of these available tools for greater accuracy.

Neglecting Body Mass Index

Although it may sound odd, the measurement of your body fat is also a considering factor for the calculation of your health insurance premium. That’s because it gives a clear indication of whether a person is underweight, overweight, or healthy.

People with a higher body mass index are more prone to health issues like diabetes, heart disease, joint-related problems, and so on. This may lead to the requirement of specialized treatments for bodily processes like pregnancy, and add a snort of tediousness to even the simplest processes.

With that said, the premium rates for such people tend to be higher. Therefore, make sure you keep your body’s BMI value in mind while calculating your life insurance premiums, and not make the same mistake of neglecting it.

The Takeaway

Purchasing a life insurance policy is a very crucial investment that needs to be done through proper research and assessment. The mistakes stated above are pretty common, but still, a lot of people make them and mess up the accuracy of their premium calculation.

If you’ve reached this far, you now have a better idea of what not to do while calculating your life insurance premiums. Therefore, make sure you keep all the points in mind and determine your premium rates more accurately.


Hi. I'm Mursaleen Siddique, The guy behind I'd rather call myself a struggling Blogger. I love Blogging with WordPress, Covering Tech, General Topics, Graphic & Web Design Inspiration., Feel free to get in touch via mentioned social media platform or E-mail me at hello[at]
Back to top button